What is the difference between Logistics and Supply Chain

The terms logistics and supply chain management are sometimes used
interchangeably. Some say there is no difference between the two terms, that supply
chain management is the “new” logistics.

While these two terms do have some similarities they are, in fact, different concepts with
different meanings. Supply chain management is an overarching concept that links
together multiple processes to achieve competitive advantage, while logistics refers to
the movement, storage, and flow of goods, services and information within the overall
supply chain.

What is Supply Chain Management?

Supply chain management, as explained by Michigan State University professors in

the text Supply Chain Logistics Management, involves collaboration between firms to
connect suppliers, customers, and other partners as a means of boosting efficiency and
producing value for the end consumer. The textbook considers supply chain
management activities as strategic decisions, and set up “the operational framework
within which logistics is performed.”

It is the efforts of a number of organizations working together as a supply chain that

helps manage the flow of raw materials and ensure the finished goods provide
value. Supply chain managers work across multiple functions and companies to
ensure that a finished product not only gets to the end consumer but meets all
requirements as well. Logistics is just one small part of the larger, all-encompassing
supply chain network.

What is Logistics?
The Council of Supply Chain Management Professionals defines logistics as “part of the
supply chain process that plans, implements and controls the efficient, effective forward
and reverses flow and storage of goods, services and related information between the
point of origin and the point of consumption in order to meet customer’s requirements.”

In Supply Chain Logistics Management, Michigan State University’s professors define

logistics as activities – transportation, warehousing, packaging and more – that move
and position inventory and acknowledge its role in terms of synchronizing the supply
chain.

The objective behind logistics is to make sure the customer receives the desired
product at the right time and place with the right quality and price. This process can be
divided into two subcategories: inbound logistics and outbound logistics.

Inbound logistics covers the activities concerned with obtaining materials and then
handling, storing and transporting them. Outbound logistics covers the activities
concerned with the collection, maintenance and distribution to the customer. Other
activities, such as packing and fulfilling orders, warehousing, managing stock and
maintaining the equilibrium between supply and demand also factor into logistics.

Key Difference

It is important to remember that while the terms should not be used interchangeably,
they do supplement each other. One process cannot exist without the other. Here are
some key differences between the two terms that will help you keep from blurring the
lines between them.

 Supply chain management is a way to link major business processes within and
across companies into a high-performance business model that drives
competitive advantage.
 Logistics refers to the movement, storage, and flow of goods, services and
information inside and outside the organization.
  The main focus of supply chain is a competitive advantage, while the main focus
of logistics is meeting customer requirements.
 Logistics is a term that has been around for a long time, emerging from its
military roots, while supply chain management is a relatively new term.
 Logistics is an activity within the supply chain.

(https://www.michiganstateuniversityonline.com/resources/supply-chain/is-logistics-the-
same-as-supply-chain-management/)

Comparison Chart

BASIS FOR
LOGISTICS MANAGEMENT SUPPLY CHAIN MANAGEMENT
COMPARISON
Meaning The process of integrating the The coordination and
movement and maintenance of management of the supply chain
goods in and out the organization activities are known as Supply
is Logistics. Chain Management.
Objective Customer Satisfaction Competitive Advantage
Evolution The concept of Logistics has been Supply Chain Management is a
evolved earlier. modern concept.
How many Single Multiple
organizations are
involved?
One in another Logistics Management is a Supply Chain Management is the
fraction of Supply Chain new version of Logistics
Management. Management.

Definition of Logistics Management

The management process which integrates the movement of goods, services,

information, and capital, right from the sourcing of raw material, till it reaches its end
consumer is known as Logistics Management. The objective behind this process is to
provide the right product with the right quality at the right time in the right place at the
right price to the ultimate customer. The logistic activities are divided into two broad
categories they are:

 Inbound Logistics: The activities which are concerned with procurement of

material, handling, storage and transportation
 Outbound Logistics: The activities which are concerned with the collection,
maintenance, and distribution or delivery to the final consumer.
Apart from these, other activities are warehousing, protective packing, order fulfillment,
stock control, maintaining equilibrium between demand and supply, stock management.
This will result in savings in cost and time, high-quality products, etc.

Definition of Supply Chain Management

Supply Chain Management (SCM) is a series of interconnected activities related to the

transformation and movement of raw material to the finished goods till it reaches to the
end user. It is the outcome of the efforts of multiple organizations that helped in making
this chain of activities successful.

Key Differences Between Logistics and Supply Chain Management

The following are the major differences between logistics and supply chain
management:

1. The flow and storage of goods inside and outside the firm are known as
Logistics. The movement and integration of supply chain activities are known as
Supply Chain Management.
2. The main aim of Logistics is full customer satisfaction. Conversely, the main aim
behind Supply Chain Management is to gain a substantial competitive
advantage.
3. There is only one organisation involved in Logistics while some organisations are
involved in Supply Chain Management.
4. Supply Chain Management is a new concept as compared to Logistics.
5. Logistics is only an activity of Supply Chain Management.

Conclusion

Logistics is a very old term, firstly used in the military, for the maintenance, storage and
transportation of army persons and goods. Nowadays, this term is used in many
spheres, not specifically in the military after the evolution of the concept of Supply Chain
Management. It has also been said that SCM is an addition over Logistics Management
as well as SCM comprises of logistics. Both are inseparable. Hence they do not
contradict but supplement each other. SCM helps Logistics to be in touch with the
transportation, storage and distribution team.

https://keydifferences.com/difference-between-logistics-and-supply-chain-
management.html)

The development of cloud technology has created an interconnected, digital world that
is essential for any business’ rapid growth. Cloud-based systems can provide
enterprises with a holistic view of their entire operations, enhancing supply-chain
visibility and effective collaboration. As businesses become increasingly digital, cloud
technology delivers greater operating efficiencies and huge savings in an evolving
business landscape. Here are five big benefits to using a cloud-based logistics and
supply chain management system.

1. Reduce Capital Expenses and Operating Costs

Deploying cloud technology requires almost no hardware, IT infrastructure, unified
global connectivity or large upfront costs. This allows companies to bypass capital
investments and streamline shipping processes to reduce any additional operating
expenses. Organizations can continually reduce costs as their service capabilities and
customer base expands, and the cloud provides an attractive alternative to more
expensive on-premise solutions. By moving your logistics and supply chain
management needs to the cloud, companies can dramatically reduce the need for
substantial upfront capital investment; any previous integration and configuration costs
can instead be transferred to operating costs.

2. Increased Efficiency
With all your services online, companies can automate repeatable tasks using
configurable rules, routing guides, policy management and custom workflows that exist
in the cloud. Cloud solutions leverage managed automation and data analysis, leading
to more intelligent systems of resupply processes. Automating your workflows simply
means the cloud will perform step-by-step to create efficient analysis based on the input
of your business and programming experts. Cloud technology empowers your
management team to make more intelligent decisions without straining your current
workforce’s budget or time.

3. Rapid Scalability and Growth

Organizations need a flexible system that will grow with you and is faster to deploy than
traditional linear on-premise ERP implementations. Cloud-based services provide your
business with the organizational flexibility to naturally re-configure certain capabilities
based on your evolving needs. With everything living in the cloud, businesses will never
need additional permanent infrastructure to manage temporary peaks or changes in an
organization. Rather, scaling upwards can become as simple as writing additional lines
of code or inputting new data into an existing cloud workforce. Facilitate a faster return
on your investment and any upgrades can be implemented in a much more timely
manner with limited manpower.

4. Consolidate Multiple System Solutions

While multiple systems, like WSM and TSM, are necessary for shipping logistics, too
many systems can cause huge delays when doing business. Having too many systems
in place requires more manpower to oversee each system and when one breaks it can
force organizations to halt their business to fix things. With the cloud, organizations can
coordinate and consolidate information with a specific solutions to prevent
miscommunications and missed savings. The SaaS architectures gives managers
global visibility across entire operations in a single system so no matter where your
employees may be they can run the exact same version of your software with no global
rollout costs.

5. Always Stay Up to Date

Cloud technology is always plugged into each of your resources to ensure up-to-date
content like carrier rates, embargoed countries lists and denied party screening data.
Connected networks like PRECISION Cloud provide these updates automatically so
your organization can make informed decisions with all the right information. A more
intelligent software results in greater actionable insights and accelerated innovation,
while providing access to real-time pricing and real-time inventory so you can maximize
the ability to meet changing demand fluctuations.

The digital age has made the world more connected than ever and companies are
recognizing the benefits of utilizing cloud-based solutions to drive efficiency and overall
business growth. With a cloud-based logistics and supply chain management system,
businesses can save time and money while gaining a holistic view of their entire
operations. PRECISION Cloud maintains the same comprehensive shipping and supply
chain tools that seamlessly integrate with your ERP solutions like QAD, SAP and
Oracle. With PRECISION Cloud, your business can leverage the functionality of our
feature-rich application in a SaaS model while making your shipping process efficient
overnight.
(https://www.precisionsoftware.com/resources/blog/-/blogs/5-benefits-of-cloud-based-
logistics-and-supply-chain-manageme-1)

https://www.oracle.com/webfolder/s/delivery_production/docs/FY16h1/doc26/Oracle-
SC-Final.pdf

Cloud-Based Supply Chain Risk Management Is Key To A Company’s Future

Here's why cloud-based supply chain risk management can make a difference in the
future of your company.
Cloud technology is leading to a number of disruptive changes for many companies all
over the world. One of the areas where cloud technology has had a large impact is with
supply chain management.

Contents

 Benefits of Transitioning to the Cloud to Address Supply Chain Concerns

 Identify critical exposures along your supply chain
 Assess suppliers based on aggregated data
 Mitigate spend risk in real time
 Use supply chain risk management to address issues in a timely manner
 Cloud Technology Resolves Supply Chain Concerns

There is a great article on Medium about the importance of moving your supply chain to
the cloud. There are many reasons that this is important if you want to minimize
disruption to your supply chain in 2020.

Benefits of Transitioning to the Cloud to Address Supply Chain Concerns

Are you concerned about a major disruption in the supply chain or potential
issues with a shady supplier? It’s a common concern in the business world. Whether it’s
caused by poor planning, a natural disaster or something else entirely, a major
disruption in the supply chain can spell doom for any business. It’s important to know
how to protect your own firm from spend risk, supply chain disruption while enhancing
the company’s ability to thrive. Moving your supply chain model to the cloud could be
one of the best ways to reduce these concerns.

It’s difficult to mitigate supply chain risk in the best of times. But in the aftermath
of the recent global pandemic, protecting the supply chain is more important than ever.
Cloud-based supply chain risk management simplifies the process and should be at the
top of any vendor’s “best practices” list within their organization. Here’s what you need
to know about the uses and benefits of supply chain risk management.

Identify critical exposures along your supply chain

Some supply chain disruptions can be caused by natural disasters, poor

business practices or even cyber-ransom.attack. Both internal and external factors play
a role in supply chain disruptions. Identifying critical issues along your own supply chain
is one of the most important aspects of risk management.

This is one the ways that technology can help resolve supply chain risks. We
recently published an article on the benefits of using AI to improve the security of supply
chains. You can use more comprehensive AI security if you have a cloud-based supply
chain model already in place.

Part of supply chain risk management involves an assessment of income

streams, business processes and expenses that could create potential risks. This
involves considerable time along with prevention, preparation, response and recovery
plans to address risks and disruptions. The last thing you want is to discover a company
went bankrupt two months after you entered into a contract with them! Using risk
management software helps identify key problem areas that can help you fix problems
before they happen.

Assess suppliers based on aggregated data

Finding a reputable supplier is a challenge in the best of circumstances. With

management software, you can get access to a supplier risk score compiled from both
the software’s data and 3rd party data. Aggregating the data streamlines the entire
process of supplier selection, allowing you to assess vendors and their associated risks
rapidly while performing your normal job duties. At the same time, the software enables
easy access to contracts, spend transactions and sourcing to create an overall simple
interface for choosing the least risky suppliers and lower the chance for a supply chain
disruption.

Mitigate spend risk in real time

Another advantage of cloud technology is real-time risk mitigation. This is a

crucial benefit as issues can arise with a moment’s notice.

Risk isn’t always apparent at a glance. While there are strategic, tactical and
operational ways to mitigate supplier risk, it helps to have all the data available at a
glance. Then, you can make decisions and reduce risk without much difficulty by using
the tools available in the software, which can include up-to-date information about
where money is going and why. Spend risk is visible in real time and you can chart
where spending is inappropriate or too high, in addition to maintaining positive
relationships with vendors and suppliers. You can view your spend broken down by a
supplier’s risk rating and then use the information to select a significantly lower risk
supplier for the future.

Use supply chain risk management to address issues in a timely manner

One of the clearest advantages of using a supply chain risk management system
is instant insight and risk ratings to help you address issues as they arise. The system
compiles data based on supplier history and 3rd party information about the supplier.
Then it assigns risk ratings to suppliers that can be analyzed to help risk managers
make good decisions. Risk ratings are an easy way to evaluate a supplier based on
their history and when the system spots an issue, it will make suggestions for
addressing a risk in a timely manner. Ultimately, these systems offer a level of risk
ratings and up-to-date information you won’t find outside of a risk management software
system. Fixing issues right away leads to better monitoring and less interruptions to
your business’ operations.

Cloud Technology Resolves Supply Chain Concerns

You need a simple solution to the complex problem of supply chain and vendor
risk management for your organization. Cloud technology could be essential for
addressing these issues. While exploring your options, it’s wise to consider something
with the dynamic, real-time ability to assess risk while allowing you to do what you need
for your business. You should transition your supply chain model to the cloud to address
them.
Risk Aware from Coupa has all of these features and more. Coupa’s software
builds in risk reduction features and simplifies the potential nightmares involved in
supply chain and vendor risk management. Incorporating multi-dimensional dynamic
risk scoring with spend visibility and numerous other useful fatures, Coupa Risk Aware
is ideal for handling your vendor risk management needs.
(https://www.smartdatacollective.com/cloud-based-supply-chain-risk-management-is-
key-to-company-future/)